Middlebury’s Revenue Shortfall
Why did the College start moving up and promoting its donation website? Answer below…
In an recent email to the faculty and staff of Middlebury College, President Ronald Liebowitz announced that Middlebury projects revenue shortfalls due to a declining economy. He writes, “Middlebury is not immune to the greater national and global economies, and we therefore need to respond to the current economic downturn in a disciplined and thoughtful fashion.” A weak national and global economy affects two major portions of Middlebury’s revenue: 1) Donations are slower than expected and 2) the endowment investments are not as profitable as expected. Those two sources plus the addition of the comprehensive fee for students make up the primary revenue sources that fund the College.
As a result of these predictions, Liebowitz writes that “Over the course of the next eighteen months, we will be looking at ways to reduce operating costs across the institution.” That’s a big deal. Liebowitz promises to curtail all new construction and renovation projects unless they are fully funded as well as have maintence dollars built in. The construction at McCullough and Proctor will be unaffected because those two are essentially already paid for. Also “protected” are need-blind financial aid and a competitive compensation program for faculty & staff. The implementation of the Strategic Plan will take longer than the ten years expected.
So what will get cut? Ron goes on to say, “I have asked our vice presidents to begin working with senior managers in their respective areas to identify ways to reduce expenditures from our operating budget. I will be engaging Faculty Council, Staff Council, and Student Government leaders to discuss the formation of a campus-wide committee that will help provide ideas and make recommendations on how best to reduce spending. We will also be looking to the larger community for ideas and suggestions by hosting open meetings throughout the year.”
From a student perspective, it’s hard for most of us to imagine Middlebury with cutbacks in spending. Heck, if students can get so riled up about no juice or trays at the dining hall, then what happens when something of greater importance goes away? There will surely be whining and complaining, but students should really understand that despite Midd’s reputation as a sheltered bubble, we really do feel the effects of the outside world. Yes, we will have to suck it up and turn our focus inward.
Then again, despite the slowing economy, there are some Middlebury programs of which we, as students, have a tougher time understanding. First and foremost, Middlebury has put a lot of time and money (at least one $7 million dollar payment two years ago and much more backup following) in to the Monterey Institute for International Studies (MIIS). Second, President Liebowitz is just getting started with the Middlebury at Mills summer program, but then again, that might make money. Third and closer to home, projects such as renovating an FIC kitchen to make officially kosher meals cost a rumored quarter million dollars. And word has it that the kitchen may not even be officially kosher anymore because the need for kitchen space with Proctor under construction this year. From big to small, one questions what are the priorities at Middlebury College and is it just an economic downturn that landed us with a shortfall?
Truth is, we don’t know. The College has not issued a “President’s Report” since John McCardell (of Choose Responsibility fame) left the President position shortly before seniors arrived at Middlebury as freshmen, four years ago. Generally, most non-profits issue donor reports even if they are fairly non-detailed accounts of the institution’s finances. Perhaps the students’ Comprehensive Fee Committee (chaired by the chair of the SGA Finance Committee) would have greater insight into where exactly Middlebury’s finances go.
MiddBlog wants to know: Do you care? What should be financially “reviewed” for reducing spending? What is absolutely necessary to the Middlebury experience and cannot be comprimised?
[thanks to the several tipsters and contributors to this article. got a tip for middblog? midd [at] gmail.com]
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In corporation, you’d cut X% budget across the board for all departments
Of course, that way it affects everyone equally, but the more efficient department will be penalized more.
Another consideration may be found here
http://debatable.wordpress.com/category/issue-1/
ops… here the full link to the article
http://debatable.wordpress.com/2007/12/03/the-inside-scoop-on-midds-tuition-fee/
Interesting post, and yes, of course we should care.
At the same time, reading the post, it sure sounded as if we do indeed live in a bubble. I was interested to know why some obvious answers to what was asked by Ryan and implied throughout the post had not been provided, or better researched ahead of the post, so I made some calls myself.
First, I learned the initiative button was moved because many alums said they hadn’t seen it; it was buried where it was located on the page. Fair enough. The spot on the web that asked alums to make gift to make the 60% participation rate, I was told, showed that “placement” mattered on the front page of the website. Took that long to discover that? Anyone could have told college officials that….
Also called about the noted “president’s report.” Better than that, got copies of the last two to be published — they were not published every year, but only periodically; the last was 2003, more than a year before President McCardell left his office. Have a look if you can. Nothing but a public relations job that most schools have wisely moved away from to save a ton of money. Useless in terms of what it tells you about how the College spends its money. Don’t waste your time. Categories are so broad they tell me little(e.g., “Instruction” 40%.” What does that tell us, really?). The whole budget divided into 5-6 areas. The remainder looks like one big advertisement. I asked why we didn’t produce them anymore, and the reason was that it was very costly (true), and did not really provide any new information than what was already out there. I assume other publications that are glossy and redundant will go the same way to reduce costs and not effect students’ lives all that much.
I was told the student comp fee committee goes into great detail every year as lead-up to making a recommendation for the comp fee to the Trustees (and administration); we should probably ask the SGA to post the report on MiddBlog or something. Very detailed. Or simply ask the treasurer’s office for the College budget. Since audited statements are public, the budget must be public, too.
I also asked about the $7 million payment to Monterey, and got into a rather extended discussion with someone in the financial office. That gift, and more like it are what is called “restricted” and was given for the specific purposes of going to the Monterey Institute. Apparently, there were more restricted gifts like that (at least $5M for Monterey), so such support of Monterey does not come directly from our budget, and the administration cannot move that money to pay for juice or other purposes. It is like a professorship the College recently received, I was told: the College must support a faculty position with that gift and not use it for other things.
So the logical question to ask is, “is a budget dollar a budget dollar, or do dollars differ?” How much of the budget is off limits for cutting or moving elsewhere because it is restricted, or supported each year by an endowment that is restricted? Seems to be a key question in the upcoming discussions of what we can and should consider for cutting.
The very friendly person in the budget office said there would be open meetings at which time administrators could answer all these questions…plus any others I might have. Oh. I also asked about the mentioned Mills program (supposed to break even or earn money the first year, if it happens, because enrollments are virtually guaranteed) and learned the kosher kitchen also mentioned in the post (not Hillel’s, but the one used in the summer for the Language Schools) was covered with a (restricted) gift and is easily “re-koshered” by the rabbi who did the koshering in the first place while it is not for other purposes during the academic year. This is somewhat confusing, but that is what I was told. Maybe Rabbi Schiffer can help here.
Back to studying. In the future, can MiddBlog provide the details to the important questions it raises rather than seeking to be provocative for the sake of, well, whatever?
g
Maybe it’s time that Middlebury refocused. Economic hard times have a tendency to do that. My perception is that Midd has spent (wasted?) a lot of money on marketing stuff lately: palatial new dorms, slick new dining halls, and carbon neutrality goals. These are all stylish enhancements designed to market the college to upcoming classes of high school graduates, but if Middlebury’s purpose is to provide an education, those things are off the mark.
It seems like Midd’s “revenue shortfall” might force the administration to prioritize education: money spent on hiring professors and bolstering funding for undergraduate research. That’s what makes Middlebury an academic institution, and I’d even say that’s what makes Middlebury. I think some people will argue that the statements the college makes (particularly in Midd’s case environmental and to a lesser extent social concerns) make up the school, but that’s not true. The quality of the education is what will make the reputation of the college down the road.
Do I care? Of course I do. Now that I’m an alumnus, Midd expects me to donate. Honestly, I don’t want to give money for new buildings I don’t think Midd really needs. Even just two years out I can tell you that my best experiences at Midd had nothing to do with how fancy Atwater dining hall was.
Well with Fuld in trouble at Lehman, I’m sure Liebowitz is wondering where that next giant donation is going to come from. Are other small colleges experiencing this drastic reduction in revenue? If not, what are they doing differently?
My frustrated question–as author of the linked article, I feel it’s relevant–why did Middlebury wait for an economic downfall before it asked itself how it can cut spending?
Why isn’t that what the college has always done?
It seems hypocritical now to find out that, all along, the comprehensive fee didn’t have to be going up as much as it was.
Now, the college is going to cut many of the things it should have cut before and the comprehensive fee will rise astronomically anyway.
Don’t like it, don’t read it, g dawg.